Unitrade clarifies funding sources for subsidiary's RM42m acquisition of metal recycler
27 Jan 2025, 06:30 pm
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KUALA LUMPUR (Jan 27): Unitrade Industries Bhd (KL:UNITRAD) clarified on Monday that its 51%-owned Intergreen Metal Sdn Bhd's acquisition of a controlling stake in metal recycling specialist Kien San Metal Sdn Bhd (KMSB) for RM42 million will be financed via a combination of capital injection to Intergreen by its shareholders, and Unitrade's own internal funds.

Unitrade plans to pump RM9.18 million into Intergreen — reflecting its 51% stake in the company — while Intergreen's minority shareholders will contribute RM8.82 million. This will expand Intergreen's paid-up capital by RM18 million — from RM2 million — to RM20 million.

The remaining RM24 million required for the acquisition will be sourced from Unitrade's internal funds, Unitrade said in a filing with Bursa Malaysia.

Its announcement came following a query from Bursa Malaysia, which sought clarification on how Intergreen would finance the acquisition it announced last week, including the allocation of the purchase consideration between internal funds and capital contributions from Intergreen’s shareholders.

Last Thursday, Intergreen signed a share sale agreement with KMSB’s sole shareholder, Hong Ching Chung, to acquire 51% in KMSB. The deal, expected to be completed in the second quarter of this year, will give Unitrade an effective 26.01% stake in KMSB.

The acquisition comes with a profit guarantee, with KMSB projected to deliver an aggregate profit after tax of RM30 million over the financial years ending March 31, 2026, 2027 and 2028.

Shares of Unitrade closed half a sen lower, or down 2.56%, to 19 sen on Monday, giving the company a market capitalisation of RM318 million.

Edited ByTan Choe Choe
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